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Consumers are growing wary of big purchases amid new housing proposals
Thursday 08 Mar 2018 Author: Tom Sieber

Government plans to address the housing crisis are providing a boost to shares in housebuilders despite the threat to strip planning permission from developers which hoard land.

The proposals, announced in an address from Prime Minister Theresa May on 5 March, also include potential sanctions for local councils which fail to draw up plans to address local housing shortages.

This could include removing their right to decide where properties are built and could make it easier for housebuilders to get planning permission.

Most industry figures point to this as among the biggest constraint on their ability to build more homes.

This helps explain why shares in the big operators in this space like Barratt Developments (BDEV) and Persimmon (PSN) traded higher on the news.

However, this share price strength could be short lived. GfK’s recent consumer confidence survey asked respondents if now was good to make a large purchase. The reading dropped to zero in February, having been as high as five a year ago. (TS)

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